Audit Committee 070908

Craig Abernathy

Description

Town of Nantucket  Audit Committee Meeting  thMinutes – Audit Committee Meeting August 13 , 2008   Present:  Ms. Libby Gibson, Mr. Michael Kopko, Ms. Patricia Roggeveen, Mr. Malachy Rice, and Ms. Constance Voges  Absent: Mr. Jim Kelly  Also present: Mr. Rick Atherton, Ms. Irene Larivee, Mr. Whiting Willauer, and Mr. Craig Abernathy  1.  Announcements and Updates:    Ms. Voges stated that the Fiscal Year 2007 Audit was complete, and that all three reports (Basic Financials, Federal Financials, and Management Letter) would be filed by Powers and Sullivan thwith the Department of Revenue by August 14 , 2008.  Ms. Gibson added that the deadline with the thDepartment of Revenue was Friday,  15 , 2008, and that either her office, Ms. Voges or the Abrahams Group had been in touch with Powers and Sullivan on a daily basis.      Ms. Voges directed Audit Committee members to information packages, which contained drafts of the Report to Management and the Federal Financials.  She stated that there had been very few changes between the preliminary drafts and the final versions.  Ms. Voges said that on the Report to Management there were a total of fifteen material weakness comments, and that of those comments six were stating that previous comments had been resolved.  Continuing, she added that several of the other comments were in regard to cash reconciliations and transfers.     In the case of off‐duty police and fire details, Ms ...

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• Publié par: Inyio
• Nombre de lectures: 61
• Langue: English

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TownofNantucket AuditCommitteeMeeting th Minutes–AuditCommitteeMeetingAugust13 ,2008 Present:Ms.LibbyGibson,Mr.MichaelKopko,Ms.PatriciaRoggeveen,Mr.MalachyRice,andMs. ConstanceVoges Absent:Mr.JimKelly Alsopresent:Mr.RickAtherton,Ms.IreneLarivee,Mr.WhitingWillauer,andMr.CraigAbernathy 1.AnnouncementsandUpdates: Ms.VogesstatedthattheFiscalYear2007Auditwascomplete,andthatallthreereports (BasicFinancials,FederalFinancials,andManagementLetter)wouldbefiledbyPowersandSullivan th withtheDepartmentofRevenuebyAugust14 ,2008.Ms.Gibsonaddedthatthedeadlinewiththe th DepartmentofRevenuewasFriday,August15 ,2008,andthateitherheroffice,Ms.Vogesorthe AbrahamsGrouphadbeenintouchwithPowersandSullivanonadailybasis. Ms.VogesdirectedAuditCommitteememberstoinformationpackages,whichcontained draftsoftheReporttoManagementandtheFederalFinancials.Shestatedthattherehadbeenvery fewchangesbetweenthepreliminarydraftsandthefinalversions.Ms.Vogessaidthatonthe ReporttoManagementtherewereatotaloffifteenmaterialweaknesscomments,andthatofthose commentssixwerestatingthatpreviouscommentshadbeenresolved.Continuing,sheaddedthat severaloftheothercommentswereinregardtocashreconciliationsandtransfers. Inthecaseofoff‐dutypoliceandfiredetails,Ms.Vogesstatedthatmoreworkneededtobe done.Toresolvethosematters,Ms.VogessaidshewillneedtolookatwhentheMassachusetts GeneralLawwasacceptedandwhetherornotseedmoneywasprovided.Sheexplainedthatthe Townpaysthepoliceandfiredetailpersonnelpriortocollectingfromthecustomersandthatin ordertodothattherehadtobeaMassachusettsGeneralLawthatwasacceptedandseedmoney provided.TheacceptanceofthelawwouldhaveoccurredbeforeMs.Voges’timewiththeTownof Nantucket.Shestatedthatastheprogramhasgrownlargermoreseedmoneyhasbeenrequiredin ordertoavoidhavingadeficitbalancewhiletheTowniswaitingforcollections.Mr.Kopkoaskedifit werenotpossibletobillinadvanceforfireandpolicedetails.Ms.VogesstatedthattheTownof NantuckethadpresumablyacceptedalawthatsaystheTownwillpayfortheservicespriorto collection.Ms.Gibsonsaidthatifpeoplearen’tpayingforthirdpartydetails,theTown’srecourseis torefusepermittingorlicensinguntilthefeesarepaid. Ms.VogesdirectedtheCommittee’sattentiontotheFraudRiskAssessmentinthe informationpackage.Theassessment,knownasSAS‐12,nowrequirescommentfromCertified

Minutes – Audit Committee th August 13, 2008Page 2 of 6 PublicAccountantsthatareperformingaudits.ThesecommentsarecontainedintheReportto Management,andMs.Vogesstatedthattheywillbeapartofthe2009Auditwork. Ms.VogesstatedthatthelasttwoitemswerenewontheFY2007report.Sheintroduced thefirstitemasMassachusettsWaterPollutionAbatementTrust(MWPAT)Loans.Shesaidthat whenMWPATapprovesaloantheTowndrawsdownontheloan.ThepracticeinTownoperations hasbeenforTomParecewithEarthTechtopreparethedrawdowns.Mr.Dickinsonmaintains regularcontactwiththeMr.Pareceduringtheprocessofpreparingthedrawdown.Ms.Vogesnoted thatthisitemshouldbeseenasresolvedinnextyear’sReporttoManagement. Ms.Vogesthencommentedontheinvestmentearningsfortheambulancerevolverfund. Shesaidthatthecommentslistedgoalongwithreconcilingcashandrecordinginterest.Shestated thattherearelawsthatgoverntherecordingofinterestindifferentkindsoffunds.Shesaidthe FinanceDepartmentneedstokeepacompletesummaryofwhichaccountsgettokeepinterestand whichfundsdonotkeepinterest.Sheaddedthatthisisanotheritemthatshouldbelistedas resolvedinnextyear’scomments. Mr.Athertonaskedifdrawdownsrequirepreparation.Ms.VogesrespondedthatEarth TechpreparestherequestthatgoestoMWPATforthedrawdownofloanproceedstoreimburse paymentstheTownhasmade.Ms.VogesstatedthatEarthTechisresponsibleforallofthe contractsandthattheyhaveallofthesupportingdocumentationthatgoesalongwiththe drawdowns.Sheaddedthatthishasbecomeamuchlargerissueduetotheincreaseinsizeof projectsoverthelastfewyears. Mr.Athertonaskedformoreinformationregardingtheitemlistedasnumberteninthe informationpackage.Ms.Vogesrepliedthattheiteminquestionreferredtoanincidentatthescale houseintheTownLandfill.SheremindedtheCommitteethatthisitemwasreportedatthetimeit occurredinthesummerof2006.Theincidentinvolvedanemployeethatleftcashreceiptsonthe counterandwalkedoffthejob.Theemployeehadbeendepositingmoneyintoaccounts,buthad incorrectlybeenrecordingthedepositsintheaccountsreceivabledetailandnotreportingthe receiptstotheFinanceDepartment.Ms.WandaHilts,currentAccountsPayableAdministrator,went outtotheLandfillandworkedormonthstocleanuptherecordingsystemandworkbackwards documentingtransactions.Ms.VogesstatedthatalloftheworkMs.Hiltsdidisnolongeratthe Landfill.Theauditorsrequestedthisdocumentation,anditisnotedinthecommentsduetothefact thattheywereunabletoviewthedocumentation.Mr.Athertonstatedthatherecalledtheincident, andthankedMs.Vogesforherexplanation. 2.ApprovalofMinutes: th Ms.RoggeveenmadeamotiontoapproveminutesfromthemeetingsofJuly9 andJuly rd 23 ,2008.ThemotionwassecondedbyMr.Kopko. rd 3.AccomplishmentssinceMeetingofJuly23 ,2008. Ms.VogesspokeabouttheFY2010Budgetprocess.Shestatedthatmembersofthe CommitteehadintimateknowledgeoftheprocessandthatMs.Lariveehadbeenworkingonthe budgetforecast.ShesaidthatMs.LariveewouldbemakingaPowerPointpresentationoftheFY 2010BudgetProjectionatthatevening’sBoardofSelectmenmeeting.

Minutes – Audit Committee th August 13, 2008Page 3 of 6 Ms.VogesstatedthattheFY2009TaxRecapisinprogress.ShesaidthattheAssessor’s officehasagoalofsubmittingdocumentationbySeptemberinordertohaveanapprovedtaxrate. Sheaddedthatanapprovedtaxrateisnecessaryinordertosendtaxbillsout.Thesebillsnormally st gooutonNovember1 . OnthetopicofFY2009cashreconciliations,Ms.VogesstatedthattheTreasurerwasstill receivingstatementsfromJuly,butRobinLaPieneisworkingonthegeneralledgerreconciliation. Mr.DickinsonandMs.LaPienehavealsobeenworkingonaweekbyweekbasissothatthemonthly reconciliationshouldbeeasytocomplete.Ms.VogesstatedthatTreasurer’scashportionhasalso beenfinished. InregardtoFY2008cashreconciliation,Ms.Vogesstatedthatcashreconciliationforthe firstthreequartershasbeencompleted.Inaddition,shesaidabouthalfofallaccountshavebeen reconciledthroughJune.SheclarifiedthatshewasreferringtotheTreasurer’scashbeingreconciled tobankstatements.Additionally,Ms.VogesstatedthatCountyreconciliationshavebeencompleted andthoseTreasurer’scashbookshavebeenturnedoverforgeneralledgerreconciliation.(Note: TheprocessofreconciliationbeginsbyreconcilingtheTreasurer’scashbooktothebank statements;theTreasurer’scashbookisthenreconciledwiththegeneralledger.)Ms.Vogessaid thatwhentheTown’sTreasurer’scashbooksarecomplete,theywillbeturnedoverfor reconciliationtothegeneralledger;addingthatMr.DickinsonandMs.LaPienewillsoonbegin workingonthefirstmonthofFY2008.Mr.Kopkoaskedifthiswasanewprocedure,andMs.Voges respondedthatitwas.Ms.VogesalsosaidthatFY2008accountsreceivableshavebeenreconciled tothegeneralledger. Mr.AthertonaskediftheaforementionedreconciliationshavebroughttheTownand Sheriff’sofficeclosertoagreementonbalancesintheCountyaccounts.Ms.Vogesrepliedthatthe twopartieswereclosertoagreement,buttherewerestillsomeissueswithCountyfunds.Shesaid thatshewasadvisedbyBillMeehan,DepartmentofRevenue,thattheCountyAdministrative portionofthedeedsexcisetaxesshouldbekeptinthedeedsexcisefundaccount,notintheCounty generalfund.ShenotedthatthissituationwascorrectedfortheFY2007Auditinordertoprovide Mr.MeehanandSheriffBretschneiderwithcorrectedbalances. Ms.Gibsonnotedthatoneofthemajormilestonesinprovidingaccuratenumberstothe Sheriff’sofficewasthecompletionoftheFY2007Audit.Shesaidthatrevenuesfromdeedsexcise taxesaredividedbetweenthreedepartments,CountyAdministration,theRegistryofDeedsandthe Sheriff’soffice.Ms.Gibsonaddedthatalthoughtheaudithasbeencompleteditdoesnotstipulate howthesefundsaredivided.Shesaidthatherofficehasnotpreparedabreakdownoffunds,butit issomethingthatisbeingworkedoninternally.Shehopedtohaveaspecificbreakdownoffundsfor theFY2009Audit. Asanaside,Ms.GibsonsaidthattheFY2009CountyBudgetwillneedtobeamendeddue tothreeitems:theSheepPondRoadsettlementandassociatedlegalcosts,replacementcostsfor theroofoftheLORANBarracks(ThiscostwastobefundedbytheSheriff,butwillnowbefundedby Correctionsfunds.),averbalagreementbytheSherifftopayfornewpolicedepartmentfirearms. Shestatedthatshewillcompletetheamendmentthismonthandthenresubmitthebudgettothe State,butthattheStateneededtohavetheFY2007Auditbeforetheycouldbesureoffund balances. Mr.Athertonstatedthatgettingthefundsclearlybrokendownwillbegoodforeveryone, andMs.Gibsonagreed.Heaskediftherewasalsoanissuewithbalancesfrom2002.Ms.Gibson

Minutes – Audit Committee th August 13, 2008Page 4 of 6 saidthattheSheriffinitiallytookissuewithsomeofthenumbers,butwhentheTownindicatedthat theywouldbelookingatexpensesaswellasrevenuestheissue“disappeared.”Ms.Vogesadded thattheTown’saccountingsystemisstraightforwardwithrespecttorevenueandexpenses.She saidwhathasn’tbeenstraightforwardistransferringthemoneytopayfortheexpenses,becauseall expensesarepaidfromoneaccount.Ms.VogesstatedthattheSheriffbelievedthatallofthe moneyinhisaccountswasavailable,butattimesthebalancedidnotreflectoutstandingrevenues andexpenses.SheaddedthattheTown’sauditreporthasneverhadalotofdetailfortheCounty, buttheTownnowhasthatkindofdetailinthegeneralledger.Continuing,shenotedthat NantucketisprobablytheonlyCountythatdoesnotprovideaseparateauditreporttothestate;she believedthiswasduetothefactthatPowersandSullivantreattheCountyasacomponentunit sincetheelectedofficialsarethesame. Mr.AthertonindicatedhisdesirethattheTownbeinapositioninwhichtheSheriffwould notquestionthebalancesinhisaccounts.Ms.VogessaidthatMs.LariveespokewiththeSheriffin March,butthenthereweresomecorrectionstothebalances.ShestatedthattheSheriffhasagreed totheprocessofcorrectingthebalances,andthatitisnowamatterofdeterminingtheamounts andprovidingthemtotheSheriff. Mr.AthertonaskediftheTown’shandlingoftheCountyAudithadanystrategicrelationship toanyeffortsbytheStatetoperiodicallytakecontroloftheCounty.Healsoaskedwhetheritwould bebettertocontinuewiththecurrentpracticeorbeginpreparingaseparateauditfortheCounty. Ms.Vogesansweredthatinregardtodeterminingwhichfundtousetotakecareofexpenses,using thedeedsexcisefundwouldbeagoodstrategy.Mr.AthertonstatedtheTownandCountyhaving onlyoneauditmightmakeiteasiertothwartanyStatetakeovereffortsbypointingoutthatthe TownandCountyareessentiallyoneentityandassuchcannotbedivided.Ms.Gibsonsaidthatthe TownwillhaveabetterideaofrequirementsfortheCountyinthenextfewweeks.Ms.Voges statedthatherofficehadprovideddetailsforMr.Meehan’srequestsinbothMarchandAugust. ShesaidthatMr.MeehanstatedthathewouldwaitfortheFY2007Audittobecompletedbefore movingforwardwithanymorequestions. Mr.KopkonotedthattheFY2007Auditwouldbesubmittedaccordingtothetimelineto whichallpartieshadagreed.Heaskedifgoingforwardallotheritemswouldbeonschedule.Ms. VogesstatedthatshewouldbereviewingsomeoftheRecapinformation,buteverythingappeared tobeonschedule.Mr.KopkoaskedaboutthetimelinefortheAbrahamsGroupStudy.Ms.Gibson answeredthatthedraftwastobesubmittedattheendofthefollowingweekorthebeginningof th thesecondweek.AfinalversionofthedrafthasaduedateofAugust29 ,2008. Inadditiontotheorganizationstudy,Ms.Gibsonstatedthatinvolvedpartieshadbeen lookingintowhatportionsoftheFY2008AuditcouldbeperformedbytheAbrahamsGroup.She saidthatsomeitems,suchasthebalancesheet,havebeenidentified.Ms.Vogesstatedthatin additiontothefinancialreportskeptbytheTown,anothercompletesetissubmittedtothe DepartmentofRevenue.SheaddedthatthesereportscouldbepreparedbyDonAndrewsworking fromMartha’sVineyard.Ms.Vogesbelievedthatthistaskcouldbeaccomplishedwithoutalotof supportfromtheFinanceDepartment.ShesaidthattheinformationcouldbesenttoMr.Andrews andhewouldputtheinformationintothecorrectformatbeforesubmittingittotheState.